November 19th, 2007
MySpace to Move Into Ad-Supported Music
By Brian Morrissey
MySpace is joining the search for a new business model for the music industry by enlisting the help of advertising.
Next March, fans of punk band Pennywise can go to stores to buy the group’s ninth album. Or they can go to the MySpace profile of Textango, a mobile music distributor, and add it as a friend, which will allow them to download the entire album for free.
The promotion is the first test by MySpace of whether it can marry its enormous reach, fledgling record label it began two years ago and roster of advertiser relationships to create an alternative for bands to the current distribution model, which nearly all participants agree is faltering.
“This happens in a time when the record industry has such a black eye,” said Josh Brooks, vp of marketing at MySpace, owned by News Corp. “It’s a nice opportunity and a way to get your music out there.”
Several companies are looking to marry advertising with music distribution. SpiralFrog launched in September with a model that lets users listen to and download music to some devices. This week, Rcrd Lbl introduced a service to offer free music underwritten by brands like Nikon, Puma and Virgin America.
Pennywise typically sells between 60,000 and 100,000 albums, Brooks said, and MySpace expects at least that many will take up the free offer and add Textango as a friend.
Yet the expected onslaught of friends was not a primary attraction of the partnership, Textango CEO Shawn Dornan said, but rather the opportunity to associate with MySpace and a new kind of music delivery.
“The overarching sprit is its breaking new barriers, doing new models and going against the status quo, which are all things we stand for,” he said.
Textango hopes to use the draw of Pennywise to attract other bands and build awareness of its service among music fans. It is looking to build awareness with bands of its service for selling music that bills a user’s cell phone for music downloads rather than requiring a credit card. Consumers text a band’s name to Textango, which then returns a code for downloading the music from Textango’s Web site. The charges are placed on the user’s phone bill.
Textango is not the first advertiser to use content or added functionality as a lure for brand friendship. 20th Century Fox last year gave friends of X-Men the chance to expand their top friends feature. It helped the film amass over 3 million friends.
The incentive of free music and ads run across MySpace, particularly its music section, will quickly build Textango’s friend count from its current 30, Brooks said. But in the end, incentives only start a dialogue, and brands will need to maintain it with their own proposition.
“Once you get to the page and make the commitment to friend, the brand has to be appealing enough to maintain it,” he said.